Patent Law – Financial Posthttp://business.financialpost.com
Canada Business News | Financial Updates & InformationFri, 18 Aug 2017 04:56:32 +0000enhourly1http://wordpress.com/http://1.gravatar.com/blavatar/b4ece3189893389a03f063830eacd95c?s=96&d=http%3A%2F%2Fs2.wp.com%2Fi%2Fbuttonw-com.pngPatent Law – Financial Posthttp://business.financialpost.com
Dow Chemical could collect largest patent infringement damage award in Canadian history after judge decisionhttp://business.financialpost.com/legal-post/dow-chemical-could-collect-largest-patent-infringement-damage-award-in-canadian-history-after-judge-decision/wcm/88bfe925-7684-4715-be25-b2786ec29e0f
http://business.financialpost.com/legal-post/dow-chemical-could-collect-largest-patent-infringement-damage-award-in-canadian-history-after-judge-decision/wcm/88bfe925-7684-4715-be25-b2786ec29e0f#respondMon, 24 Apr 2017 09:00:31 +0000http://business.financialpost.com/?p=754169]]>TORONTO — Dow Chemical Co. is in line to collect the largest patent infringement damage award in Canadian history following a courtroom victory against Nova Chemicals Corp.

A federal judge last week issued a written decision that spells out how much Dow can claim from an estimated $1 billion in revenue Nova collected while infringing on Dow’s Canadian patent 2,160,705, which sets out a method to make the thin plastic packaging used in things such as garbage bags and food wrappings.

Dow actually proved its infringement case in federal court in 2014, but litigation continued on how the parties should calculate the damages. A 17-day damages trial was heard in Toronto last December and January. Justice Simon Fothergill issued the public version of his 78-page written decision on April 19.

Justice Fothergill ordered Nova to disgorge profits it made during the infringement. The companies must now use the judge’s methodology to figure out how much those profits should be. “The parties’ accountants will calculate the sums owed by Nova to Dow based on the conclusions reached by the Court in this stage of the reference,” Justice Fothergill wrote.

Steve Garland, a lawyer with property law boutique Smart & Biggar, which represented Dow, said the result could be the largest reported monetary award to date in a Canadian patent infringement case.

“I’ve been litigating IP cases and patent cases for 25 years,” Garland said. “This, without a doubt, has been the most complex and interesting case that I’ve been involved in and our team here has been involved in.”

Indeed, the litigation involved several hearings and levels of the court.

An initial round of litigation focused solely on whether there was any infringement at all. Justice John O’Keefe ruled in September 2014 that Nova products called “SURPASS” polymers infringed Dow’s patent. That ruling was reviewed by the Federal Court of Appeal, which upheld the trial decision in 2016. Nova sought leave to appeal the case to the Supreme Court of Canada, but that application was dismissed last Thursday.

Meanwhile, Justice Fothergill heard evidence from several experts on how to assess the value of the infringement damages. His resulting formula takes into account not just how to determine the profits that must be disgorged, but also the timing during which Nova sold products.

In particular, the decision takes into account so-called “springboard” profits. “I think it’s the first time in Canadian patent history where a springboard award on an accounting of profits has been awarded,” Garland said.

Dow’s Canadian patent expired in April 2014. Had Nova waited until the Dow patent expired, it would have still needed a stretch of time to “ramp up” sales of products made using the technology. By using the technology while it was still under Dow’s patent, Nova had already established sales.

“[S]pringboard damages are nothing more than a type of loss to be proven with evidence, and I see no reason why this principle should operate differently to a plaintiff’s gains in the context of an accounting of profits,” Justice Fothergill wrote.

A NAFTA tribunal has refused to question Canadian judicial interpretations of domestic patent law.

The ruling came after Eli Lilly sued Canada for violating the North American Free Trade Agreement because Canadian courts had found patents for two of its drugs to be invalid under Canadian law.

The court decisions, Lilly claimed, violated minimum standards of treatment guaranteed to foreign investors under NAFTA and expropriated Lilly’s investment in Strattera, used in the treatment of ADHD, and Zyprexa, used to treat mood conditions including bipolar disorder and depression.

“The case brought by Lilly is exactly the type of case that has irked opponents of modern trade deals,” said Nathaniel Lipkus of Osler, Hoskin & Harcourt LLP in Ottawa. “By allowing investors to sue governments for damages, trade agreements are said to elevate the rights of foreign investors over domestic sovereignty.”

The tribunal decision is a response to such criticism. The decision panel has set a very high bar for when judges’ decisions can be challenged under NAFTA. While not shutting down such challenges completely, the panel concluded that judicial decisions can form the basis of a NAFTA claim only in exceptional circumstances where there is clear evidence of egregious and shocking conduct.

“The good news is that we no longer need to worry that trade tribunals will become supranational courts of appeal over domestic property law disputes,” Lipkus said.

International treaty dispute resolution mechanisms engaging independent panels are a source of controversy in the protectionist environment that is emerging around the world. The NAFTA mechanism has been one of the rationales behind U.S. President Donald Trump’s desire to renegotiate the trade deal. Opposition to the dispute resolution provision in the Canada-EU Comprehensive Economic and Trade Agreement (CETA) nearly derailed that agreement as well.

“The decision should foster confidence in the current investor rights framework,” Lipkus said.

The Lilly case centred around the “promise doctrine,” which has played a prominent role in Canadian patent law since 2005.

“Under this doctrine, Canadian courts have reviewed patent specifications to determine whether the inventor had made an express promise concerning the invention’s utility at the time the patent application was made, and whether the patent data fulfilled that promise,” said Scott MacKendrick, a lawyer in the Toronto office of intellectual property boutique Bereskin & Parr LLP.

Determining the promise is a contentious and unpredictable issue in Canadian patent litigation. It offers fruitful ground for attacking pharmaceutical patents in particular, including those on several blockbuster drugs. Apart from Strattera and Zyprexa, the list includes Mevacor, a cholesterol lowering agent; Nexium, an acid reflux medication; Evista, used to treat and prevent osteoporosis; Altace, prescribed for high blood pressure; and Xalatan, used to ameliorate high eye pressure. Lilly has claimed that decisions of this kind have cost it $1 billion in sales and deprived the country of 280 jobs.

Canada is the sole developed nation that requires applicants to demonstrate the “utility” of an invention at the time of application, Lilly pointed out.

“Eli Lilly alleged that Canada had created what the company perceived to be highly onerous standards in relation to the promise doctrine,” MacKendrick said.

As it turns out, the Supreme Court of Canada currently has the fate of the “promise doctrine” under reserve in a case involving Nexium.

“The Supreme Court’s decision is anticipated to issue later this spring or possibly in early summer,” MacKendrick said.

Financial Post

]]>http://business.financialpost.com/legal-post/eli-lilly-loses-nafta-challenge-brought-against-canada/wcm/71afa93d-e1ac-4e6d-a048-427593cc53b7/feed0ZyprexaJulius MelnitzerHow a U.S. trademark dispute binds Asian-American rock band The Slants with the NFL’s Washington Redskinshttp://business.financialpost.com/legal-post/how-a-u-s-trademark-dispute-binds-asian-american-rock-band-the-slants-with-the-nfls-washington-redskins/wcm/e47b5262-47f4-41d3-adfe-4374cc1aa6a1
http://business.financialpost.com/legal-post/how-a-u-s-trademark-dispute-binds-asian-american-rock-band-the-slants-with-the-nfls-washington-redskins/wcm/e47b5262-47f4-41d3-adfe-4374cc1aa6a1#respondMon, 16 Jan 2017 14:50:51 +0000http://business.financialpost.com/?p=728367]]>The NFL’s Washington Redskins may not have a lot in common with an alternative rock band from Portland, Oregon called The Slants. Yet both the football team and the band are in the midst of a U.S. free speech battle over their constitutional rights to trademark their names.

Simon Tam, bass player and founder of the self-described “Chinatown Dance Band,” says his group’s name is an intentional allusion to the Asian heritage of its four members. Yet as far as the United States Patent and Trademark Office is concerned, the band’s name is a disparaging racial epithet. It says U.S. law prevents the office from registering such names.

On Wednesday, lawyers for the rock band — among them a Canadian originally from Richmond Hill, Ont., named Joel MacMull — will appear in the U.S. Supreme Court to argue that the band has a constitutional right to trademark its controversial name.

We want to take on these stereotypes that people have about us, like the slanted eyes, and own them

The Slants case has sweeping implications. Pro-Football Inc., the company that owns the Washington Redskins football team, is intervening in The Slants’ U.S. Supreme Court battle, as have the six Native American plaintiffs who are fighting to have the U.S. PTO cancel the Redskins’ trademarks.

The PTO cancelled the Redskins’ trademark registrations in 2014 after the native plaintiffs sued. The NFL team’s case is currently under appeal, but that matter is being held in abeyance pending the outcome of The Slants’ case before the U.S. Supreme Court.

“As we go, so shall the Redskins,” MacMull said.

At issue is a U.S. statute known as the Lanham Act. The legislation says the U.S. PTO must refuse to register trademarks that “may disparage … persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”

Lower U.S. courts have struck down the disparagement clause, ruling that it violates the free speech guarantee in the First Amendment of the U.S. Constitution.

Tam states in court documents that he founded The Slants in 2006 not just to play music, but also to fight discrimination against Asian-Americans. He chose the band’s name as a form of “reappropriation” — that is, when minorities take terms that were once directed at them as insults, and use them as badges of honour.

“We want to take on these stereotypes that people have about us, like the slanted eyes, and own them,” Tam says in his brief to the U.S. Supreme Court. “Everyone in the band really loves the fact that we can try and empower Asian Americans and say, ‘You know what? We are slanted. Who cares? We’re proud of that.'”

The U.S. government is fighting to protect the disparagement clause. Lawyers for the U.S. PTO argue the clause does not violate the First Amendment because it doesn’t actually curtail speech. Rather, it deals only with whether things can be trademarked. Simon Tam “may use any term he wishes in his songs, in his advertising, in his band’s name, or in his marks,” the patent and trademark office lawyers state in their written argument.

More than 30 free speech groups, academics, think tanks, business groups and rights activists have flooded the Supreme Court with briefs that take various positions on the Tam case. For example, the San Francisco Dykes on Bikes Women’s Motorcycle Contingent Inc. tells the court that the disparagement clause has resulted in the rejection of its application for a trademark.

The U.S. Supreme Court will hear oral arguments in the case on Wednesday, then likely adjourn to write a decision that won’t appear for several months.

]]>http://business.financialpost.com/legal-post/how-a-u-s-trademark-dispute-binds-asian-american-rock-band-the-slants-with-the-nfls-washington-redskins/wcm/e47b5262-47f4-41d3-adfe-4374cc1aa6a1/feed0Supreme Court Offensive TrademarksvonhasselbachHow one Winnipeg company scratches more than just the surface of the lottery ticket markethttp://business.financialpost.com/legal-post/how-one-winnipeg-company-scratches-more-than-just-the-surface-of-the-lottery-ticket-market/wcm/473cfd63-e9ca-452e-b5ab-c83e3c39a25b
http://business.financialpost.com/legal-post/how-one-winnipeg-company-scratches-more-than-just-the-surface-of-the-lottery-ticket-market/wcm/473cfd63-e9ca-452e-b5ab-c83e3c39a25b#respondThu, 01 Dec 2016 22:44:24 +0000http://business.financialpost.com/?p=714438]]>WINNIPEG — Pollard Banknote Ltd. has been around for 109 years, but, despite its name, it has never printed paper currency for governments. And, say the fourth-generation family that controls the publicly traded company, it never will.

Instead, Pollard Banknote, based in Winnipeg, is responsible for printing roughly 85 per cent of the scratch-and-win lottery tickets sold in Canada. It’s also the second-largest printer of those products in the world, operating in 22 countries and racking up annual sales of about $250 million.

The North American lottery market generated revenues of about US$74 billion in 2014, and Pollard Banknote estimates that the continental market for printing lottery tickets is about US$440 million. In addition to its dominant position in Canada, Pollard Banknote is the second-largest supplier of instant win tickets in the United States, supplying 28 of the 44 American lotteries with scratch-and-win-games, or 21 per cent of the business by instant tickets sold.

Put simply, Pollard Banknote has figured out that the one sure-fire way to get rich in the scratch-and-win lottery ticket business is to be the company that prints the tickets.

Brothers John and Doug Pollard, co-chief executives, and Gordon, chairman, together run what was once just a humble, commercial print shop.

Their father, Lawrie Pollard, was responsible for the company’s unusual name. In the mid-1980s, he drew up a plan to transform the family’s commercial printing business, then known as Saults & Pollard, into a niche player that would print currency for the Bank of Canada and added “Banknote” to the company’s name in anticipation of the currency contract.

The government had other plans. It eliminated paper $1 bills — the high-volume product Lawrie wanted to print — and replaced them with the loonie coin.

John Woods for Financial Post

Yet all was not lost. Having recast the business as a specialty printer with a focus on security products, Lawrie saw another opportunity: government-run lotteries. The company threw itself whole hog into the lottery business. It worked.

“But the name stuck,” Doug said. “We’ve been known as Pollard Banknote for 30-odd years, and we’ve never printed a banknote in our lives.” And, John adds, “have no plans to.”

Unlike those who win the lottery, Pollard Banknote does not often make the news. But it reported a profit of $2.8 million (12 cents a share) on sales of $62.7 million in the Sept. 30 third quarter, up from profit of $1.9 million (eight cents) on sales of $57.9 million in the same period of 2015.

The company was founded in 1907 by the current leadership team’s great-grandfather. Through three generations, the family’s small but successful business printed things such as company letterheads and business cards. Lawrie’s desire to focus on security printing in the 1980s resulted from his recognition that things like laser printers would eventually disrupt the plain vanilla commercial printing business.

As a result, Pollard Banknote started printing specialty items such as bank cheques, stock and bond certificates, and postage stamps. “We used to print the high school exams because they could trust us to keep it secret,” John said.

While it was building out that security printing business, Pollard Banknote started producing simple “pull tab” lottery tickets and bingo cards for charities. Government-run lotteries also need high levels of security. Pollard Banknote landed a contract to print tickets for Western Canada Lottery Corp. in the mid-1980s, and it hasn’t looked back.

Another boon came through the onset of free trade with the U.S. Prior to the Canada-U.S. Free Trade Agreement, Canadian lottery ticket producers were barred from the U.S. market. “It wasn’t even a tariff or a duty, it was an absolute prohibition,” John said. “Lottery products could not cross the border.”

Free trade opened things up, and roughly half of Pollard Banknote’s sales today are in the U.S., with another 25 per cent coming from Canada and the remainder from Europe and Asia. In addition to Pollard Banknote’s two plants in Winnipeg, the company has printing facilities in Barrhead, Alta., Sault Ste. Marie, Ont., Ypsilanti, Mich., and Council Bluffs, Iowa.

It wasn’t even a tariff or a duty, it was an absolute prohibition

Lawrie handed day-to-day operations of the company to his sons in 1995. Now in his 80s, he is still an occasional presence in the office — and the company’s longest-serving employee, with 69 years’ service under his belt.

Pollard Banknote went public as an income trust in 2005, then converted to common stock in 2010. Only 26 per cent of the company is in public hands, with the Pollard family holding the rest.

Its life as a public company has not been easy. Its IPO was priced at $10, which means original investors would have made money off the income trust distributions, but the stock has never returned to that initial price. It’s currently around the $8 mark, and that’s not as good as the company would like.

The company’s stock also took a hit when the Canadian dollar hit par with the U.S. dollar, which hurt because three quarters of the company’s sales are from outside Canada.

The company would like to expand through acquisitions funded by a mix of debt and equity — even if that reduces the Pollard family’s 74-per-cent stake — because the industry is a competitive one.

Pollard Banknote may dominate the scratch-and-win ticket printing business in Canada, but it’s the smallest of the global companies that supply tickets to the global US$283.3-billion lottery business.

The company’s annual sales in 2015 were $242 million, or about US$180 million at the current exchange rate. It is dwarfed by its two primary competitors: International Game Technology PLC, based in Europe, had annual sales of US$5 billion last year, while top-line revenue at Las Vegas-based Scientific Games Corp. was US$3 billion.

Scientific Games and Pollard Banknote are also currently embroiled in a legal dispute. For years, the U.S. company fought to get Canada’s Intellectual Property Office to register a patent for the design of a scratch-and-win lottery ticket.

John Woods for Financial Post

Scientific Games eventually succeeded, but Pollard Banknote brought a successful legal challenge that had the patent “impeached” on the grounds there was nothing novel in the ticket design. The Canadian company won the case at trial last summer, but Scientific Games is appealing.

“Certainly, it’s a very simplistic invention, if it’s an invention at all,” said Pollard Banknote’s general counsel, Riva Richard.

Pollard Banknote pays close attention to its larger competitors. Yet in an unusual twist for the current business age, the company is less worried that a new entrant might suddenly burst onto the scene with a better product.

For one thing, setting up a physical ticket printing business would set you back about $50 million, Doug said, and the industry’s cost structure is not favourable.

The cost of printing a scratch-and-win lottery ticket is about one cent per unit. A government-run lottery makes about a 25-cent profit margin off a $1 ticket after it pays out prizes and retail commissions. Undercutting a ticket supplier such as Pollard Banknote would involve convincing a government lottery to worry only about that one-cent cost against its 25-cent profit.

“The governments aren’t really interested in taking a risk on a new supplier,” Doug said.

On the digital side, Doug said the company expects that business to grow, so it has formed a joint venture to develop and market digital lottery products that are distributed by a few U.S. state lottery companies on iTunes and the Android store.

You can see this at work by comparing gas and lottery ticket sales: when gas prices drop, lottery ticket sales rise.

“One of the prime retail distribution points is a gas station convenience store. If you’ve got a few extra dollars after you fill your car, you might buy some lottery tickets,” Doug said.

Online, by contrast, is much clumsier because it requires users to jump through hoops since players must provide personal information to facilitate online payments. There are some committed digital players, but the digital lottery market contributes less than 10 per cent to industry sales.

If there is a future in digital, it is in what Pollard Banknote sees as a hybrid ticket. For example, a Swiss lottery recently sold tickets that contained a QR code that is revealed by scratching the ticket. The code is then used to access a site online to discover whether players have won. “We call this, the ‘space between,'” Doug said.

Despite plans to expand, the company likes the space it currently occupies.

“We’re the second-largest producer of scratch-and-win tickets in the world, in an industry that’s very hard to break into,” Doug says. “What the industry has shown is that even when recessions hit, the sales don’t really drop off that much.”

That’s why when it comes to the lottery ticket printing business, the Pollard brothers like their odds.

Pollard Banknote Ltd., a Winnipeg-based company that prints the tickets used by several lottery companies throughout North America, has prevailed in a Canadian patent battle over a technology used to make fraud-proof scratch-and-win instant lottery tickets.

In a case filed by Pollard Banknote, Justice George Locke of the Federal Court of Canada has declared that the patent held by a rival lottery ticket manufacturer, Scientific Games Products (Canada) ULC, is invalid and of no effect.

Pollard Banknote has been challenging SG’s patent for almost two decades, first filing a series of “protests” to the original patent application, which was filed back in 1996, and continuing with a court case to invalidate the patent, which was ultimately issued on Sept. 17, 2013. SG counter-sued, claiming Pollard Banknote’s lottery ticket products infringed the 2013 patent.

It all came to a head in Toronto last May with an 11-day hearing. Justice Locke released his a 92-page decision on July 28.

Justice Locke ultimately found that SG’s Canadian scratch-and-win patent, No. 2,752,551, should never have been issued because the application covers technologies and methods that were already known and available to lottery printers at the time of the application. He also dismissed SG’s counterclaim for infringement, finding that if SG’s patent for ticket design had been valid, tickets printed by Pollard Banknote did not infringe the ‘551 patent.

Pollard Banknote

“I grant Pollard’s request for a declaration impeaching the ‘551 Patent. In the event that I am wrong, and the claims of the 551 Patent are valid, I conclude that said claims are not infringed by Pollard,” the judge wrote.

Rob Rose, chief financial officer with Pollard Banknote, said the ruling confirms that Canada’s government owned lottery companies won’t have to pay any fees demanded by SG. “The industry and ourselves had operated on the correct belief that (the patent) wasn’t valid,” Rose said in an interview. “What it does is add some clarity to Canadian lottery customers, who were being approached by Scientific Games and told they owed money because they used its IP. We said that’s not true, and now that this has been set aside, it’s no longer an issue.”

“While we respect the trial court, we are reviewing its ruling for possible appeal,” said Scientific Games spokesperson Mollie Cole in an email.

The ‘551 patent, called Printed Document Including Bar Code Authentication System, describes a way to use special bar codes as a way to authenticate winning instant lottery tickets. SG and a predecessor company, BABN Technologies Corp., designed the bar code authentication system as a means to prevent consumer fraud.

Canadian Patent and Intellectual Property Office

The judge described the 203-word text of the patent as “mercifully short.” He had a different view of the 17-year long patent challenge, describing it as “extraordinarily long and complicated.”

Justice Locke found that the innovations SG claimed to have invented in the ‘551 patent were actually concepts that were already known to lottery ticket makers prior to the patent application. Legally, this issue is called “obviousness” and lawyers and courts boil it down to a simple analysis. First, can someone skilled in the business at issue read the patent and say, “I could have done that”? If the answer is yes, another question follows: “Why didn’t you?”

In the scratch-and-win ticket case, Pollard Banknote was able to establish that the ‘551 patent was based on concepts that were already known to lottery ticket makers. Methods for using bar code technologies to limit fraud had been written up in lottery trade publications prior to the application. And the judge found the Canadian patent office had in 1995 already received a patent application for a bingo-style instant lottery ticket.

The judge therefore concluded that, without too much trial and error, anyone knowledgeable about the lottery ticket printing business could have independently replicated the process described in the ‘551 patent. What’s more, Pollard had an answer to that crucial “why didn’t you?” question. It produced lab notes that verified it was already working on the bar code technology that SG would later patent.

The judge noted that Pollard had been filing “protests” against the ‘551 patent application for years. Indeed, examiners from Canada’s patent office had at least six times rejected SG’s proposed patent wording. SG amended the application wording several times, and the judge was surprised that during the case, SG changed its position on the meaning of the words that were ultimately included in the patent description, according to paragraph 235 of the judgment. “In order to obtain allowance of the application for the ‘551 Patent, SG explicitly represented that this wording refers to a single scratch-off coating. It is remarkable that the position SG now takes concerning this wording is quite different.”

]]>http://business.financialpost.com/legal-post/after-17-year-battle-pollard-banknote-victorious-in-patent-battle-over-scratch-and-win-tickets/wcm/2a2718b6-3d52-49b4-b832-488459b4dd85/feed00809pollardvonhasselbachPollard BanknoteCanadian Patent and Intellectual Property OfficeCanadian patent settlement sets model for not-for-profit gene testinghttp://business.financialpost.com/legal-post/canadian-patent-settlement-sets-model-for-not-for-profit-gene-testing/wcm/3f0ea957-0482-429f-ad8d-586ddc8290f2
http://business.financialpost.com/legal-post/canadian-patent-settlement-sets-model-for-not-for-profit-gene-testing/wcm/3f0ea957-0482-429f-ad8d-586ddc8290f2#respondTue, 12 Apr 2016 19:33:48 +0000http://business.financialpost.com/?p=648779]]>It took 20 years for Richard Gold, associate dean at McGill University’s Faculty of Law, to find a test case that would clear the way to removing gene patents as an obstacle to diagnosing a life-threatening heart condition for Canadian patients.

In March, CHEO and Transgenomic Inc., a global biotechnology company based in Connecticut, announced they had settled a lawsuit challenging five gene patents owned by the company. The patents related to Long QT syndrome, a potentially deadly heart rhythm condition.

Under the terms of the settlement, Transgenomic agreed to provide CHEO, located in Ottawa, and all other Canadian public sector hospitals and laboratories, the right to test Canadians for Long QT on a not-for-profit basis.

But Lipkus said the settlement’s impact is much broader than the five genes and particular syndrome at issue in the lawsuit. “This agreement defines a practical pathway that will allow Canadian public hospitals and labs to conduct genetic testing without legal roadblocks from gene patents.”

The settlement model is important because public hospitals want to offer full panels of genetic testing without cost. As for the patent owners, the model allows them to avoid taking on the public sector by granting non-commercial licenses to non-profit public institutions.

“When you have companies that have patented one piece of a gene sequence here and another there, hospitals have to be concerned about whether they can sequence all the relevant genes,” Lipkus said. “If they’re forced to send the testing to an outside lab that has the rights to the genes, it can be very expensive.”

That’s what was happening in the Long QT genetic testing process, which is among the most common in Canada. Transgenomic owns the patents on five of 13 significant cardiac genes, of which 13 are related to Long QT.

“CHEO had been excluding these five genes from the testing process,” Lipkus said. “If the patient wanted a complete picture, the testing had to be done in Transgenomic-licensed labs in the U.S. at a cost of US$4,000.”

Until about 2009, the conventional wisdom was that genes could be patented. As far back as 2000, Myriad Genetics, Inc., a U.S company that had patents on breast cancer-related genes, wrote a cease-and-desist letter demanding that public hospitals refrain from conducting certain breast cancer tests on the basis they infringed the patents.

“The government’s response was to ignore the letter and the patents,” Halwani says. “That became the status quo.”

In other words, the issue appeared to have gone away for all practical purposes. “I had come to the conclusion that no one would ever raise the issue in a Canadian court,” Gold said.

But in 2010, the U.S. District Court for the Southern District of New York confounded everyone by ruling that genes could not generally be patented. In 2013, the U.S. Supreme Court varied that judgment, holding that not naturally occurring genes could be patented while naturally occurring genes could not.

With the ruling, the Ontario provincial government also changed its policy with respect to gene patent holders.

“If the patent holder gave notice of its interest, the government wouldn’t allow the tests to be done in Ontario,” Lipkus said. “And sending the test out of Ontario required the government’s approval every single time.”

All this got Lipkus and Halwani — then both at Gilbert’s — thinking.

“We’re both students of patent law and we thought that there was a need to get the issue clarified in Canada,” Lipkus says.

The pair created what they called the “Genetic Autonomy Project” and spent some two years trying to find a representative plaintiff for a Canadian lawsuit that mimicked the U.S. attack on Myriad’s breast cancer patents.

They ran into resistance. Because Myriad was not forcing the issue in Canada or challenging the test done on their genes in Canada, hospitals didn’t want to upset the laissez-faire status quo that existed regarding breast cancer genetic testing, by far the most common form of such testing in Canada.

“In general, Canadian public institutions are loath to pursue litigation or rock the boat in any way,” Halwani said.

But by 2012, Canadian hospitals were sending some 700 genetic tests to the U.S. annually.

“That’s where Richard [Gold] came in,” Lipkus said. “He turbocharged the whole thing and put us in touch with CHEO and the entire genetic network community.”

Gold’s interest in gene patents originated in 1998 when he wrote a report on the patentability of human genes, a highly controversial legal issue that remains largely unresolved, particularly in Canada. He has since advised governments and health organizations on the issue. He was also involved with the Myriad litigation.

Gold knew that CHEO had a genetic team that was at the forefront of genetic testing and running into the gene patent problem with some regularity. He referred the lawyers to the hospital.

“The genetics department were genuinely frustrated by the situation and saw this as an important issue for the hospital and medical care generally,” Lipkus said.

In January 2013, the hospital retained the lawyers to investigate the possibilities on a pro bono basis. Gold was able to include funding for research associated with a possible test case in one of his grants.

“For the next year, we spent tens of thousands on student research and working through the patents with the geneticists,” Lipkus says.

The hospital board had significant concerns, Lipkus said. “They didn’t want to be seen as attacking types of patents they might want to pursue themselves, they wanted to make sure they were responsible about the scope of what they were trying to invalidate, and they wanted to make sure that no patient dollars were diverted to the litigation.”

Fortunately, the hospital was the beneficiary of an anonymous bequest that had no strings attached and could be allocated to the litigation expenses, including the $10,000 payment into court required of patent litigants.

“It was enough to get us as far as we would need to go on a shoestring,” Lipkus said.

What the hospital was not willing to do was run the risk of losing and paying costs. The solution was to sue and bring a motion requiring each side to bear its own costs on the basis that the public interest was engaged. But Federal Court Justice Roger Hughes made it clear that he wanted the case to reach a point that allowed him sufficient information to determine the issues.

CHEO’s claim had been filed in November 2014. At the time, California-based TGX Medical Systems owned the patents. TGX filed its defense in February 2015.

“Then Transgenomic bought the owner of the exclusive licensee of the patent, PGxHealth, and that became a game-changer,” Lipkus said. “Suddenly you had a defendant that had been dragged into the litigation and was not really participating voluntarily in a type of lawsuit that is historically very expensive.”

One factor may have been the principle of compulsory licensing that exists in Canada’s Patent Act: the government can mandate a compulsory license for public non-commercial use if a patent holder refuses to grant a license on reasonable commercial terms.

“The settlement represented reasonable commercial terms because it preserved Transgenomic’s freedom to profit from the private sector while acknowledging that gene patents should not prevent the public sector from delivering health care services,” Gold said. “That has always been my goal.”

]]>http://business.financialpost.com/legal-post/canadian-patent-settlement-sets-model-for-not-for-profit-gene-testing/wcm/3f0ea957-0482-429f-ad8d-586ddc8290f2/feed0Richard GoldJulius MelnitzerFederal appellate court denies government challenge to patent granted to public servanthttp://business.financialpost.com/legal-post/federal-appellate-denies-government-challenge-to-patent-granted-to-public-servant/wcm/7f84fccb-ee4f-431c-a387-382acc9232cf
http://business.financialpost.com/legal-post/federal-appellate-denies-government-challenge-to-patent-granted-to-public-servant/wcm/7f84fccb-ee4f-431c-a387-382acc9232cf#respondFri, 19 Feb 2016 14:45:42 +0000http://business.financialpost.com/?p=633450]]>The Federal Court of Appeal has ruled that patents cannot be invalidated because an inventor has failed to disclose his status as a public servant.

The February ruling in a case called Brown v. Canada quells fears among patent professionals about the growing success of challenges to the validity of patents that have nothing to do with the invention itself, but focus on some technical aspect of the approval process. Previous successful challenges have targeted inadequate fee payments and inaccurate filing fees.

The concerns were worrisome enough to bring the Intellectual Property Institute of Canada to the case as an intervenor. Peter Wilcox, a lawyer with Belmore Neidrauer in Toronto and president of IPIC, was counsel alongside Bennett Jones lawyers Trent Horne and Melissa Dimilta.

The case’s origins go back to 1999 when Louis Brown filed a patent application in 1999 for an invention relating to decontamination and containment of biological and chemical hazards. The patent issued in 2010. In 2012, Brown filed a patent infringement lawsuit in the Federal Court against the crown and HDT Tactical Systems. HDT had been awarded a government contract for the same kind of system sold by Brown’s company.

The crown defended the action, and also advanced a counterclaim that Brown’s patent was invalid. The counterclaim included a novel legal issue. Brown was a member of the Supplementary Reserve of the Canadian Forces when he filed his patent application. The crown alleged that Brown failed to comply with his obligations under the Public Servants Inventions Act (PSIA) and disclose his status as a public servant during the patent application process. Consequently, the crown argued, the patent was invalid.

On a motion for summary judgment, a judge of the Federal Court determined that Brown was a “public servant” when the application was filed, and that omitting this information constituted an untrue material allegation, even though the Patent Act does not require this information to be included in an application.

Brown appealed the decision to the Federal Court of Appeal, where IPIC was granted leave to intervene. IPIC successfully argued that the Patent Act and the Patent Rules are a complete code for the grant or loss of patent rights, and that any non-compliance with other Federal legislation, including the PSIA, can never constitute grounds to invalidate a patent.

The Canadian Intellectual Property Office, the organization that approves or rejects Canadian patent applications, has not enthusiastically supported the existence of business method or software patents, even though the Federal Court of Appeal ruled in 2011 that they are “patentable subject matter.”

“CIPO’s examiners continue to harbour a bias against BMPs,” says Neil Henderson of Borden Ladner Gervais LLP’s Toronto office, who represents MD Physician Services Inc., a wealth management company owned by the Canadian Medical Association with more than $35-billion in assets.

MD recently applied for Canadian and U.S. patents for its proprietary fund management “Manage the Manager” process, which was engineered exclusively for Canadian physicians.

It is unclear whether MD will succeed in obtaining the patent. Statistics from CIPO suggest the office is disinclined to grant “computer-implemented patents,” such as BMPs.

“The ratio of allowed computer-implemented patents are low, even taking into account applications under that heading that are not controversial,” says Ian McMillan of Bereskin & Parr LLP’s Mississauga office.

The difficulty is that the law in both Canada and the U.S. remains in flux. In Canada, the Federal Court of Appeal’s 2011 decision in the Amazon.com “one-click” case, is the seminal decision.

In that case, Amazon obtained a U.S. patent for the one-click feature in 1998. But in 2004, the CIPO refused to issue a Canadian patent for the process. On appeal, Canada’s Patent Appeal Board shocked the intellectual property community with a definitive statement against the patentability of BMPs in Canada. The Board also categorically stated that previous decisions allowing BMPs were wrong.

In November 2011, however, the Federal Court of Appeal rejected the PAB’s analysis and ordered CIPO to re-examine whether the one-click patent was “patentable subject matter.”

Yet the court’s ruling didn’t completely decide the issue. Although the Court was clear that business methods could be patented, it left it up to the board to decide applications on a case-by-case basis going forward. CIPO did ultimate grant Amazon.com its “one-click” patent, but this doesn’t guarantee other applications will be approved by CIPO in the future.

So while the court recognizes that BMPs are theoretically patentable, the practical question of whether such patents are widely available remains unsettled. Indeed, the Amazon.com case has not sparked the wave of applications that some intellectual property lawyers thought it would.

“The applications of which I’m aware were in the pipeline before the Amazon decision,” Mr. Henderson says. “But then, for whatever reason, people aren’t inclined to publicize their applications so there may be more around than is generally known.”

The issue can be a little intense for lay observers. The difficulty boils down to a definition. Many examiners regard BMPs as abstract schemes or methods or ideas — things that have never been patentable. By contrast, examiners will grant patents to mathematical formulas or computer models that can be used to generate a practical result. “For example, there is no dispute about the patentability of an image compression system in which a mathematical algorithm compresses a picture on a cell phone so it can be transmitted,” Mr. McMillan says.

That works for software. Trouble is, Canadian patent examiners aren’t entirely sold on the idea that a business method is akin to computer model or a mathematical formula.

“With the computer included as part of the process, it’s difficult to treat a BMP or software as merely abstract,” Mr. McMillan says. “So what the examiners do is strip out the computer elements as non-essential, and say that all that is left is an abstract scheme or method.”

Applicants have been known to overcome examiners’ resistance, however, with well-considered arguments that the computer elements are essential for the implementation of a business method or software application.

“Sometimes the people at the patent office give in and sometimes they dig in their heels,” Mr. McMillan says.

For its part, MD believes that its 40-year-old business method, called “Managing the Manager,” is unique and patentable.

“The process is multi-faceted and innovative and goes well beyond the analysis and selection of a fund manager to helping us determine which combination of investment philosophies, processes and partnerships will likely deliver the best future risk-adjusted performance for our clients,” says Craig Maddock, one of the process’s five inventors and vice-president of investment management at MD.

Financial Post

]]>http://business.financialpost.com/legal-post/wealth-manager-tests-canadas-taste-for-business-method-patents/wcm/39da9a1c-adef-438c-b163-2f8cc4ce78b0/feed0amazon-earningsJulius MelnitzerGun-related U.S. patents at 35-year highhttp://business.financialpost.com/legal-post/gun-related-u-s-patents-at-35-year-high/wcm/2d002da5-baae-44dc-840b-3c3ad285455d
http://business.financialpost.com/legal-post/gun-related-u-s-patents-at-35-year-high/wcm/2d002da5-baae-44dc-840b-3c3ad285455d#respondTue, 03 Dec 2013 17:36:19 +0000http://business.financialpost.com/?p=393243]]>Gunmakers such as Smith & Wesson Holding Corp. and Sturm Ruger & Co. are boosting firearms sales by building weapons that are more accurate and easier to use, with gun-related U.S. patents at a 35-year high.

Demand is growing as more states allow people to carry concealed weapons and lawmakers discuss limiting sales after mass shootings at public venues like schools and movie theatres. Ownership is rising among women and the elderly.

Manufacturers are competing for sales with improvements such as magazines that increase a bullet’s accuracy or are lower in cost. Of 6,077 patents issued since 1977 in the firearms class, 19% were in the past four years, with a record 370 issued last year, according to the U.S. Patent and Trademark Office.

“There’s money to be made and everybody wants to protect their moneymaker,” said Larry Hyatt, owner of Hyatt Guns in Charlotte, North Carolina, which has been in business for more than 50 years and carries more than 7,000 guns. “There is a huge amount of technology going into these products.”

Recent innovations include patents issued for voice-command shooting, rifle scopes and a new trigger system. Not all are for the weapons themselves: there’s a gun rest that could attach to a hunter’s leg and a pistol holder for next to the bed. The rise in patents has brought on litigation, with at least eight lawsuits filed since the start of 2013.

By many measures, U.S. firearms sales are growing.

Background checks, conducted every time a buyer attempts to purchase one or more firearms, surged 54% from 2008 to 2012, with a record 19.6 million checks completed in 2012, according to Federal Bureau of Investigation data.

Sturm Ruger, of Southport, Connecticut, the largest publicly traded U.S. gun maker, reported a 45% jump in third-quarter sales this year due to high demand for new firearms including the LC380 pistol, the SR45 pistol and the Ruger American Rimfire rifle.

New owners were helping to drive sales, Chief Executive Officer Michael Fifer said in a conference call with analysts Nov. 6.

Smith & Wesson reported record sales of US$588-million for the fiscal year ending April 30, up 43% over 2012, according to a June press release. President James Debney credited “innovative new products” and “robust consumer demand.”

The results come despite a push by President Barack Obama and some state legislators for gun-control measures following shootings including the deaths of schoolchildren in Newtown, Connecticut, theatregoers in Aurora, Colorado, and government workers in Washington; and the wounding of former U.S. Representative Gabrielle Giffords in Tucson, Arizona.

Defending Patents

Magazines, which hold the bullets and can affect the trajectory, are a source of dispute among gun manufacturers. Browning Arms Co. sued in April, claiming Sturm Ruger is infringing a patent for a magazine that’s smaller and improves the accuracy of the bullet’s flight.

Smith & Wesson, based in Springfield, Massachusetts, has a patent for a low-cost AR-15-style rifle magazine that can use .22 ammunition, and accused Plinker Arms LLC of copying it.

“We are always looking at innovative, better ways to manufacture and to bring products to the market place,” said Paul Pluff, spokesman for Smith & Wesson. “Any time you patent a product, it is absolutely in the company’s best interest to defend the patent.”

Smith & Wesson said in its annual report that it will “vigorously pursue and challenge infringements of our trademarks, copyrights and service marks.” Starting in 2011, it added the word “patents” to that warning.

Three-Year Fight

An increase in patents and litigation happens in any industry seeing growth, like the smartphone battles between Apple Inc. and Samsung Electronics Co. If there’s an iPhone that transformed the firearms industry, it was when Glock GmbH began selling a handgun with a polymer frame rather than metal in the 1980s.

Other gun manufacturers thought it would never take off, Hyatt said. That changed when sales shot up, and police departments around the country started buying them. It prompted a three-year patent battle between Glock and Smith & Wesson that was settled in 1997.

Gun-patent battles date back as far as 1852, when the forerunner of Smith & Wesson, the Massachusetts Arms Co., tried unsuccessfully to break Colt Manufacturing’s hold on handgun manufacturing for civilians, according to a display at the Virginia Military Institute Museum in Lexington, Virginia.

Settling Disputes

Modern patent fights are resolved more quickly. Smith & Wesson’s case against Plinker was filed in April and settled by November. Plinker now has a license to produce the patented magazine, General Counsel Eric Rogers said in e-mail.

A lawsuit in which Sig Sauer Inc. challenged a patent for a bolt carrier owned by Uzi maker Israel Weapon Industries Ltd. was filed in January and settled a month later.

The gun patent boom shows no end. Sturm Ruger’s “core business strategy” is to “introduce new products to drive demand,” Fifer said during the analysts’ call.

Military and border officials also are looking for new weapons and related products, said Scott France, chief operating officer of Military Systems Group Inc. The Nashville, Tennessee, company got a patent Nov. 12 for an accessory mount, which can be used for weapons, lights or even sonic devices.

“There are a lot of people making weapons and nobody is filling the niche of how do you mount them,” France said.

Gun Frenzy

Other innovations are for products to appeal to the recreational shooter, the hunter or new owners.

During the peak gun-buying frenzy in early 2013, Brian Rafn, director of research at Morgan Dempsey, a 25-year investor in Sturm Ruger, visited Gander Mountain’s Gun World store in Milwaukee. A sign outside said: “Limit two assault rifles per day per customer.”

Customers were piling shopping carts high “like a hurricane was coming,” Rafn said in a telephone interview.

While the buying frenzy may have abated since then, the threat of a crackdown on gun sales will keep them strong, gun-shop owner Hyatt said.

]]>http://business.financialpost.com/legal-post/gun-related-u-s-patents-at-35-year-high/wcm/2d002da5-baae-44dc-840b-3c3ad285455d/feed0Gun Debate TradeshowBloomberg NewsNestle loses patent on a Nespresso single-serve coffee machinehttp://business.financialpost.com/legal-post/nestle-loses-patent-on-a-nespresso-single-serve-coffee-machine/wcm/4d390c53-91a7-4558-9449-fdc308258a8f
http://business.financialpost.com/legal-post/nestle-loses-patent-on-a-nespresso-single-serve-coffee-machine/wcm/4d390c53-91a7-4558-9449-fdc308258a8f#respondTue, 26 Nov 2013 15:37:11 +0000http://business.financialpost.com/?p=390709]]>Nestle SA lost a patent on one of its Nespresso single-serve coffee machines, the latest legal setback for one of its fastest-growing brands.

The European Patent Office revoked the patent, which covered the lower-cost Pixie brewer, in oral proceedings on Nov. 19 and Nov. 20, according to Rainer Osterwalder, a Munich-based EPO spokesman. Nestec SA, the unit of Nestle that held the patent, can appeal the decision once the full minutes of the proceedings are released in a few weeks, he said.

Nestle, the world’s largest coffee maker, has said its Nespresso machines are protected by 1,700 patents, yet to date the company has been unable to stem the flow of less-expensive copycat capsules from rivals like D.E Master Blenders 1753 and Mondelez International Inc.

Last month, an EPO appeals board revoked another Nespresso patent, and in April the Vevey, Switzerland-based company lost a battle to block Dualit Ltd. from making capsules in Britain.

“We are disappointed by the decision,” which “fails to recognize the unique innovations inherent in the design of the Nespresso system,” Diane Duperret, a spokeswoman for the brand, said by e-mail. Nespresso will decide whether to appeal once the EPO publishes the ruling, she said.

The patent covered a brewing unit “that is of simpler conception and of lower cost compared to existing brewing units,” according to the patent specification on file with the EPO. In 2011, Nestle introduced the Nespresso Pixie, which costs 149 euros (US$201) on its website, compared with 599 euros for its Gran Maestria machine.

Since its debut in 1986, Nespresso has become one of the company’s fastest-growing and most profitable brands. In 2010, Nespresso accounted for about 15% of Nestle’s growth, Nomura analyst David Hayes has estimated. The Swiss company forecast in April the brand may achieve about 500 million Swiss francs (US$549 million) of additional sales this year. Nestle stopped reporting sales details for Nespresso last year.

]]>http://business.financialpost.com/legal-post/nestle-loses-patent-on-a-nespresso-single-serve-coffee-machine/wcm/4d390c53-91a7-4558-9449-fdc308258a8f/feed0NestleBloomberg NewsNike receives patent for shirt that ‘coaches’ golfers on swinghttp://business.financialpost.com/legal-post/nike-receives-patent-for-shirt-that-coaches-golfers-on-swing/wcm/85ab5560-96b7-43a3-93cb-75f41a653f51
http://business.financialpost.com/legal-post/nike-receives-patent-for-shirt-that-coaches-golfers-on-swing/wcm/85ab5560-96b7-43a3-93cb-75f41a653f51#respondTue, 03 Sep 2013 17:11:15 +0000http://business.financialpost.com/?p=360656]]>Nike Inc. said it can make a golf shirt that could replicate what a coach does.

The world’s largest maker of sporting goods obtained about a dozen patents on Aug. 27, including one invention with the potential to irk golf pros.

“A coach or trainer can greatly improve an athlete’s form or body positioning, which can result in improved athletic performances,” Nike said in patent 8,516,616, issued by the U.S. Patent and Trademark Office. “For most people, however, a coach or trainer is not always available” and there isn’t an easy way to check positioning on your own, the company said.

The patent covers “articles of apparel providing enhanced body position feedback.” The clothing will have tighter material in areas key to a repetitive movement, like a golf swing. The snug fit increases muscle stimulation, giving a better feel that will improve form, according to the patent.

Obtaining a patent doesn’t mean for certain that the invention will be used in a product. Companies are granted millions of patents a year and many never become a reality.

In the golf patent, Nike describes thin elastic material embedded into the part of the garment that covers the lower back to heighten sensation. That part of the body is essential to a swinging motion and is impossible to see and difficult to feel while performing, which is why a coach is needed to give feedback, the document said.

Besides boosting performance, the shirt also could lower injury risk by keeping athletes in proper form as they swing a golf club or a baseball bat over and over again, Nike said.

Mary Remuzzi, a company spokeswoman, declined to comment on the patent.

Under U.S. Golf Association rules, compression and posture garments are allowed during competition while clothes designed to store and release energy aren’t, said Joe Goode, a spokesman for the Far Hills, New Jersey-based group that governs golf rules in the U.S. and Mexico. He declined to comment on whether a product based on the Nike patent would be permitted.

Bloomberg News

]]>http://business.financialpost.com/legal-post/nike-receives-patent-for-shirt-that-coaches-golfers-on-swing/wcm/85ab5560-96b7-43a3-93cb-75f41a653f51/feed0Bloomberg NewsThe energy patent gold minehttp://business.financialpost.com/legal-post/the-energy-patent-gold-mine/wcm/ec00b1f3-8b56-4017-80d8-d55834a943b8
http://business.financialpost.com/legal-post/the-energy-patent-gold-mine/wcm/ec00b1f3-8b56-4017-80d8-d55834a943b8#respondTue, 03 Sep 2013 17:05:35 +0000http://business.financialpost.com/?p=360645]]>Battles for supremacy in the US$680-billion oil and gas industry are moving from the hardhats and steel-toed boots of the drilling rig to the Brooks Brothers suits of law firms representing the biggest patent holders.

Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc., the world’s largest oil service providers, secured a total of 1,257 patents in the United States last year, more than twice the annual number of a decade earlier. In the past three years, Exxon Mobil Corp. doubled its revenue from technology it licenses to others.

The impulse to patent harks to Silicon Valley as companies stake their claims to new techniques and equipment for hydraulic fracturing, automated drilling and computer software that helps find and reach oil and gas deposits. As research and development expenses rise, stronger patent defense is part of the arsenal energy companies deploy to win or maintain market share, said Bart Showalter, a partner at Baker Botts in Dallas.

The world’s four largest oilfield service providers spent a combined US$21.8-billion on research and development since 1997, according to Barclays Capital. Patent protection gives companies exclusive rights to use or sell their technology, and to sue if someone else copies it.

Baker Hughes was granted 368 patents last year, compared to 138 in 2002. During the same period, Schlumberger patents rose to 588 from 235. Halliburton’s patents rose 80% to 301.

Among the oilfield innovations that have won protection in the past few years: lasers to help drill wells, wired drill pipe for high-speed data transfer, and a subsea “glider” robot that delivers gear to the seafloor.

The patent race may lead to a swell of litigation as the energy industry follows a pattern established by smartphone manufacturers, said Dean Becker, chief executive officer of ICAP Patent Brokerage, the world’s largest. At least a dozen lawsuits have been filed in federal courts over the past year including two pitting the world’s largest service companies against one another.

“This is the beginning of a tsunami to come,” he said. “You’ve got a big marketplace for people to figure out how to fit in.”

]]>http://business.financialpost.com/legal-post/the-energy-patent-gold-mine/wcm/ec00b1f3-8b56-4017-80d8-d55834a943b8/feed0Exxon MobilBloomberg NewsCanadian hockey bag maker sues Adidas unit over bag designhttp://business.financialpost.com/legal-post/canadian-hockey-bag-maker-sues-adidas-unit-over-bag-design/wcm/36d742fb-1111-41a4-9d94-beffe8c0068e
http://business.financialpost.com/legal-post/canadian-hockey-bag-maker-sues-adidas-unit-over-bag-design/wcm/36d742fb-1111-41a4-9d94-beffe8c0068e#respondTue, 21 May 2013 19:05:01 +0000http://business.financialpost.com/?p=323852]]>Lugging a hockey bag from home to the rink can be a juggling act. The duffel bag can get bulky, messy and heavy. And if you’re a player or someone who has lived with one, you know things get awfully smelly.

After many years of hauling his own goalie equipment to and from arenas, Palgrave, Ont., resident and pizza restaurant owner Aldo Buccioni set out to design a bag that would make the trip less of a hassle.

In 1995, he invented and patented a suitcase-like hockey bag with wheels, zippered storage compartments and a strap that securely fastens a player’s stick. And in 2006, he partnered with Tottenham, Ont.-based equipment company Grit Inc. to market his invention, the Hockey Tower bag.

Seven years later, the pair has launched their second lawsuit in three years to keep other manufacturers from replicating their uniquely wedge-shaped hockey bag, this time against sporting goods manufacturer Sport Maska Inc. located in St. Laurent, Que. The previous case, which was filed against luggage maker Travelway Group International Inc. and Hockey Canada in 2010, was settled out of court.

Sport Maska, which operates under the name Reebok-CCM Hockey, is in turn a unit of sporting goods titan Reebok International Ltd., which is in turn part of the Adidas Group of companies. Plaintiff Grit alleges the design of defendant Sport Maska’s soon-to-be released “Reebok 20K” wheel hockey bag infringes both its utility patent and registered industrial design.

“If a court determines that Reebok’s 20K hockey bags contain all of the essential elements or features of the hockey equipment carrier as claimed, then they infringe the patent and are liable to Grit,” according Grit’s lawyer, Geoffrey North of intellectual property law boutique anticIPate Law. “If a court determines that Reebok’s 20K hockey bags do not differ substantially in appearance from Grit’s design as registered, then they infringe the industrial design and are similarly liable to Grit.”

Mr. North and his clients believe that the functionality and features of the Reebok 20K are “too close” to those of the Hockey Tower. They want Sport Maska to stop making, selling and advertising the Reebok 20K, and they’re seeking damages too.

The statement of claim contains allegations that have yet to be proven in court.

Sport Maska denies the allegations and filed a counterclaim, contending that “Grit has made false or misleading statements tending to discredit the business, wares or services of Sport Maska,” and arguing that both Grit’s patent and design should be “invalid and void.”

Norton Rose Canada LLP, the firm representing Sport Maska, declined to comment. “Sport Maska Inc. is defending the lawsuit and does not comment on pending ligation cases,” the company’s lawyer Joanna Chriqui added in an email.

While Grit does not know how much the release of the Reebok 20K bag will hurt its bottom line, Mr. North believes the consequences could potentially be fatal for the company.

Having Reebok-CCM come into the market with a version that Grit alleges is almost an identical copy, creates the possibility of Reebok-CCM taking a significant portion of Grit’s sales, Mr. North says. “This is all that Grit does.”

Financial Post

]]>http://business.financialpost.com/legal-post/canadian-hockey-bag-maker-sues-adidas-unit-over-bag-design/wcm/36d742fb-1111-41a4-9d94-beffe8c0068e/feed0Grit v. ReebokcpellegrininpU.S. Supreme Court to rule on patentability of DNA and RNA in breast cancer gene casehttp://business.financialpost.com/legal-post/u-s-supreme-court-to-rule-on-patentability-of-dna-and-rna-in-breast-cancer-gene-case/wcm/796b0a6e-f1f3-493a-9743-bf791b40e8f7
http://business.financialpost.com/legal-post/u-s-supreme-court-to-rule-on-patentability-of-dna-and-rna-in-breast-cancer-gene-case/wcm/796b0a6e-f1f3-493a-9743-bf791b40e8f7#respondWed, 10 Apr 2013 15:20:56 +0000http://business.financialpost.com/?p=306746]]>On Monday, April 15, the U.S. Supreme Court will hear arguments on the patentability of DNA and RNA in response to a claim by Myriad Genetics that it owns breast cancer genes that it has isolated.

The American Civil Liberties Union, which is appealing a divided federal court of appeals decision that allowed patents on the genes but disallowed patents to compare the gene sequences, will be arguing that the genes can’t be patented because they are “products of nature.”

In February, an Australian Federal Court dealing with the same genes, held that naturally occurring DNA and RNA that had been isolated through removal from its natural environment and separated from other cellular components was patentable.

In his ruling, Justice John Nicholas conceded that naturally occurring DNA and RNA as it existed in the body could not be patented. Isolating the genes, however, created “an artificial state of affairs” that made the isolated material patentable under the “manner of manufacture” category because it had a “new and useful economic effect” that was “materially different to nucleic acid found in nature.”

In the ongoing battle between innovators and generic pharmaceutical manufacturers, Teva Canada Ltd., a generic manufacturer, succeeded in its bid to quash the patent for Viagra (sildenafil) owned by Pfizer Canada.

The result is a cautionary tale for patent agents and for both generic and innovator pharmaceutical manufacturers. Patent applicants need to be careful that the patent description and any examples listed in the patent should directly and explicitly identify the invention.

The Supreme Court of Canada on Nov. 9, 2012, released a decision that the Canadian patent for the infamous little blue pill was invalid. No sooner was the decision released than a generic version was already on its way to market.

But, in a rare and pioneering attempt to mitigate the effects of the SCC’s decision, Pfizer Canada filed an application for rehearing on Nov. 15, 2012 claiming that the court exceeded its jurisdiction. The legal community waits with baited breath to see whether the SCC will consider Pfizer’s application.

Meanwhile, we have the court’s initial decision to consider. The court focused upon whether the Viagra patent had sufficiently disclosed the essential elements of the invention when the patent was awarded. The court relied on one of the foundational principles of patent law, namely that of the “patent bargain.”

Simply stated, a patent awards a monopoly for a limited time to an inventor for an innovation in exchange for the disclosure of the inner workings of this invention to the public. It is a foundational principle governing the patent regime. The intent is to push forward innovation by allowing others to put the creation into practice and build upon the innovation. Consequently, the description of the patent, must give clear instructions to the public to reproduce the inventions.

In a unanimous (7-0) decision, the Supreme Court held that the Viagra patent did not fulfill its end of the bargain. Since sildenafil already existed at the time the patent was awarded, the inventive concept of the patent was not sildenafil itself, but rather the use of sildenafil for the treatment of erectile dysfunction. It determined that the patent failed to enable the public to decipher that sildenafil, as opposed to the other compounds encompassed by the patent, was the active and useful compound for the treatment of erectile dysfunction. In the eyes of the court, the Viagra patent awarded the benefit of monopoly without providing the required full disclosure of the invention.

The insufficiency of the specification was not considered intentional, as Pfizer disclosed its inventive use of sildenafil within the patent. However, since the claims, as drafted, ended with two individually different compounds, only one of which was sildenafil, the true invention was obscured. As such, the disclosure failed to state the invention in clear terms.

For generic and innovator pharmaceutical manufacturers, this decision is a cautionary tale. It is common practice for patent agents to employ a cascade structure of claims, narrowing the subject matter moving down the chain. While this practice remains acceptable, patent holders should be mindful that the patent description and the examples listed in the patent should directly and explicitly identify the invention.

Guest blogger Christelle Gedeon is an associate at Fasken Martineau DuMoulin LLP who practices in intellectual property and regulatory affairs.

While 90% of patents are improvements on existing inventions, legal realities can make filing for such patents complicated because intellectual property law is designed to protect existing patent holders. If the invention you are adding something to is one to which you hold the rights, the process is relatively easy. Provided your improvement follows the Canadian Intellectual Property Office (CIPO) criteria of being new, useful and inventive, you should have very little difficulty in getting a patent.

The process becomes more complicated when the existing invention belongs to someone else. Although CIPO acknowledges that many patents are improvements to existing ones, you need to make sure you do not infringe on the rights of the patent holder of the existing invention. This means you need to be very clear in your application about why your patent is new, useful and inventive, otherwise your patent application will either be a long and drawn-out process or unsuccessful.

As someone seeking a patent for an improvement on an existing invention, you need to obtain a licensing agreement with the owner of the existing invention. In turn, the owner of the existing invention must license the improvement from you if they want to use it. Here is an example: Andrew invents and is granted a patent for a round doorknob and locking mechanism. A second inventor, Beth, then invents a handle that makes the door easier to use. Beth would need to sign a licensing agreement with Andrew if she wants to use his locking mechanism as part of the device. Andrew needs a licence from Beth if he intends to incorporate the handle in any future doors he sells.

When filing for a patent in Canada, CIPO recommends including prior art, the published body of knowledge relating to your invention. In this section, you discuss the previous problems inventors have faced in this area and how they attempted to solve them. Shortly after that, you should discuss how your invention solves this dilemma and how your invention is different than previous attempts to solve this problem.

Patent examiners will often object to one or more claims on patent applications, so you should be sure to have the means to refute any potential objections. It is best to consult a patent agent or a lawyer who specializes in this area to ensure your patent application is successful. Additionally, your rights when it comes to improving existing inventions vary depending on legal precedents set in the different jurisdictions in which you intend to produce or market your invention. This means it is important to seek professional assistance in every one of these jurisdictions.

Av Utukuri is the CEO/CTO at Nytric, a Canadian innovations company

avutukuri@nytric.com

]]>http://business.financialpost.com/financial-post-magazine/a-better-mousetrap/wcm/5116fc0c-f6e3-4622-bc53-f8cb083ee63b/feed0specialfpAppeal court orders reconsideration of Amazon.com ‘one-click’ patenthttp://business.financialpost.com/legal-post/federal-court-of-appeal-orders-reconsideration-of-amazon-com-one-click-patent/wcm/955c0028-cff9-4c8d-804c-3e295e12b219
http://business.financialpost.com/legal-post/federal-court-of-appeal-orders-reconsideration-of-amazon-com-one-click-patent/wcm/955c0028-cff9-4c8d-804c-3e295e12b219#respondMon, 28 Nov 2011 16:30:24 +0000http://business.financialpost.com/?p=116528]]>UPDATE: Comments from Prof. Emir Aly Crowne and a link to the Norton Rose bulletin on the case were added at 2:45pm. The item was originally published at 11:30am.

The Federal Court of Appeal has overturned a lower court ruling that had granted Amazon.com the right to receive a Canadian patent for the company’s one-click online shopping business method.

At first blush, the appellate court’s move might seem to spell trouble for members of the intellectual property bar who were hoping to see the lower court decision trigger a wave of patent applications for business methods. But the appellate court’s order is not necessarily a loss for Amazon.com.

In a unanimous three-judge ruling written by Madame Justice Karen Sharlow, the Federal Court of Appeal has found that a lower court judge overstepped his bounds by ordering the Commissioner to issue the patent. The appellate court now orders the Commissioner to reconsider the patent, though it offers some thoughts on what the Commissioner may wish to consider in making that decision.

The “one-click” system used by online retailers is so widespread now that it’s hard to recognize that there was a time when the idea was new. Amazon.com applied for its one-click patent 13 years ago, but the Commissioner of Patents ultimately refused the application. The company then sought judicial review and won last Fall, with Mr. Justice Michael Phelan of the Federal Court of Canada ordering that the Commissioner issue the patent. The government appealed that order.

Reading through the ruling, the appellate court seems to back many of the ways in which Judge Phalen interpreted the statute. The guidance the appellate court is providing to the Commissioner might therefore bode well for Amazon.com or for anyone who’d like business method patents to become part of the Canadian IP law landscape. Indeed, the appellate court is clear on business methods: there is no Canadian case law that says business methods are statutorily out of bounds.

That said, some commentators, such as Prof. Emir Aly Crowne of the University of Windsor, believe the appellate ruling introduces some uncertainties that could result in the case moving up to the Supreme Court of Canada. The parties have 60 days to appeal the Nov. 24 ruling.

In the meantime, victory is not yet assured for Amazon.com. Even though the appellate court seems to support Judge Phelan’s interpretations of what should be theoretically patentable, the court doesn’t necessarily say his analysis should lead to a foregone conclusion that the business method patent must have issued. Such decisions are better left to the experts on the Commissioner’s staff. The appellate court would rather the matter be decided by the Commissioner than a judge. Judge Sharlow wrote:

“Anyone who undertakes a purposive construction of a patent must do so on the basis of a foundation of knowledge about the relevant art, and in particular about the state of the relevant art at the relevant time. For the Commissioner, that assistance comes in the form of submissions from the patent applicant and, I assume, from staff at the patent office with the appropriate experience.”

There are some interesting words of warning for the Commissioner. The appellate court says that the Commissioner needs to decide each application based on whether the matter at hand fits within the definition of the statute and within principles established by judicial precedent. The Commissioner had been using three tests to determine admissibility of applications. Even if those tests were derived from principles based on statute and precedent, Judge Sharlow wrote that adjudicators should be wary of relying on such tests:

“Catch phrases, tag words and generalizations can take on a life of their own, diverting attention away from the governing principles.”

Norton Rose OR LLP has published a bulletin on the decision. Among other things, the bulletin reviews some of guidance the appellate court provides on what qualifies for a patent.

Prof. Emir Aly Crowne of the law school at the University of Windsor has also reviewed the decision in a paper available online through SSRN. He believes that the appellate court has actually introduced some uncertainty into how patents should be considered, and recommends the matter proceed to the Supreme Court of Canada:

“In the end, the Federal Court of Appeal’s decision does not deny that business methods, when properly construed, constitute patentable subject matter. In my view, the Court was at times unfair to the Court below and unnecessarily introduced uncertainties into an area of law that could certainly benefit from much greater clarity. Selfish reasons aside, an appeal to the Supreme Court of Canada would most certainly be welcome.”

Change patent laws to create jobs: Cuban
Debt downgrades and a dearth of general employment aside, one of the hidden job killers Mark Cuban believes is keeping some of America’s most successful companies from hiring more is the United States patent system.

In a blog post published Saturday evening, the billionaire owner of the NBA’s Dallas Mavericks and Magnolia Pictures lamented the surge of patent lawsuits embroiling the technology industry in particular. He blames U.S. patent laws for requiring companies to spend massive sums amassing intellectual property war chests to defend themselves against such lawsuits instead of using that money to grow and compete.

“Between having to pay our lawyers a lot of money to review each [case], to increasing insurance rates and settlement costs because we can’t afford to pay to fight the nonsense, it’s an enormous expense,” he wrote.

“So much so that money that would have gone to new hires to improve and sell the product has to be saved to pay to deal with this [expletive].”

His point about patent litigation limiting job growth has already been directly measured. Last month, a number of mobile software application developers were found to be pulling their business out of the U.S. market as patent litigation fears were said to have reached a ‘tipping point’.

“I think almost everyone I know in the software development field has a deep hatred for patents and the way they’ve been used in our field,” programming expert Martin Fowler said in a blog post published on Friday evening.

“While patents (even software patents) are a good idea in principle, in practice they have turned into an unmitigated disaster and would be better scrapped.”

His point is the relatively long shelf life of modern patents, combined with an increasing focus on patenting processes and methods that already exist, is stifling innovation as companies devote valuable time and resources towards patenting things for no reason other than as a potential legal defense.

Mr. Cuban’s point is very much the same. The reason major technology companies have been scooping up broad patent portfolios in recent months, he argues, has nothing to do with a desire to own or expand upon a piece of technology.

“If all sides have “nuclear patents” they can respond to patent litigation with equal force,” he wrote.

“In other words, if you have enough “nuclear patents” no one will sue you for patent infringement because you have enough power to respond in kind.”

“It’s like playing a game of thermo nuclear war [and] it’s crazy and costing this country jobs.”

To emphasize his point, Mr. Cuban makes reference to the US$900-million bid Google Inc. made in April to buy the 6,000-strong patent portfolio from former Canadian technology darling Nortel Networks Corp.. Using all caps to express his bewilderment, he notes the portfolio eventually sold for US$4.5-billion to a consortium of the world’s largest technology companies.

Smugglers use zip line to bring iPads into China
It is already fairly well known the great lengths to which Chinese counterfeiters will go to pass their Apple Inc. product knockoffs as genuine. But as the video below describes, something even more amazing is the lengths to which some Chinese smugglers will go to bring bona fide iPads and iPhones into their country.

]]>http://business.financialpost.com/technology/bootup-u-s-patent-system-a-hidden-job-killer/wcm/81d838f8-2315-4096-af69-699966aa6c15/feed0PATENT-OFFICEJameson BerkowAmazon.com ‘One Click’ case to be appealedhttp://business.financialpost.com/legal-post/amazon-com-one-click-case-to-be-appealed/wcm/36f26060-6378-4b75-92a1-73154e550fe2
http://business.financialpost.com/legal-post/amazon-com-one-click-case-to-be-appealed/wcm/36f26060-6378-4b75-92a1-73154e550fe2#respondTue, 16 Nov 2010 18:07:37 +0000http://business.financialpost.com/?p=14917]]>About a month ago, Mr. Justice Michael Phelan of the Federal Court of Canada overturned a decision by the Patent Commissioner that refused a patent to Amazon.com for its “one click” business method.

The decision in Amazon.com Inc. vs. Commissioner of Patents is notable as the judge made it clear that patents can be granted to inventors who come up with novel business methods. In simple terms, this overturned a policy that pretty much limited patents to inventors of physical things, like tools or gadgets.

The Commissioner of Patents had until Monday to file an appeal, and that’s what’s happened. The federal Department of Justice filed the Notice of Appeal on Monday.